Presented below is a composite list of Art. 23 cases reporting UNCITRAL Digest cases and other Art. 23 cases. All cases are listed in chronological sequence, commencing with the most recent. Asterisks identify the UNCITRAL Digest cases, commencing with the 28 January 2000 citation reported below. Cases are coded to the UNCITRAL Thesaurus.

English texts and full-text English translations of cases are provided as indicated. In most instances researchers can also access UNCITRAL abstracts and link to Unilex abstracts and full-text original-language case texts sourced from Internet websites and other data, including commentaries by scholars to the extent available.

The UNCITRAL Digest of case law on the United
Nations Convention on the International Sale of Goods [*]

A/CN.9/SER.C/DIGEST/CISG/23 [8 June 2004]. Reproduced with the permission of UNCITRAL.

ARTICLE 23

A contract is concluded at the moment when an acceptance of an offer becomes effective in accordance with the provisions of this Convention.

DIGEST OF ARTICLE 23 CASE LAW

1. Article 23 provides that a contract is concluded when an acceptance of an offer becomes effective. Except as provided in article 18(3), an acceptance is effective at the moment it reaches the offeror in accordance with article 18(2). The exception in article 18(3) provides that an acceptance is effective at the moment the offeree performs an act if, by virtue of the offer or as a result of practices which the parties have established between themselves or of usage, the offeree is authorized to indicate its acceptance of the offer by an act.

2. A contract is concluded when communications between the parties, as interpreted in accordance with article 8, establish that an acceptance of an offer reaches the offeror.[1] One decision concluded that an offer conditioned on the approval of the parties’ respective Governments, when properly interpreted, did not postpone conclusion of the contract under the Convention.[2] Another decision found that a supplier and a potential sub-contractor had agreed to condition the conclusion of the sales contract on the award of a sub-contract by the main contractor.[3]

3. Once a contract is concluded, subsequent communications may be construed as proposals to modify the contract. Several courts subject these proposals to the Convention’s rules on offer and acceptance.[4]

4. Article 23 does not address where a contract is concluded. One court deduced from article 23 that the contract was concluded at the place of business where the acceptance reached the offeror.[5]

FOOTNOTES

* The present text was prepared using the full text of the decisions cited in the Case Law on UNCITRAL Texts (CLOUT) abstracts and other citations listed in the footnotes. The abstracts are intended to serve only as summaries of the underlying decisions and may not reflect all the points made in the digest. Readers are advised to consult the full texts of the listed court and arbitral decisions rather than relying solely on the CLOUT abstracts.

[Citations to cisgw3 case presentations have been substituted [in brackets] for the case citations provided in the UNCITRAL Digest. This substitution has been made to facilitate online access to CLOUT abstracts, original texts of court and arbitral decisions, and full text English translations of these texts (available in most but not all cases). For citations UNCITRAL had used, go to <http://www.uncitral.org/english/clout/digest_cisg_e.htm>.]

5. CLOUT case No. 308 [AUSTRALIARoder v. Rosedown [Federal Court] Adelaide 28 April 1995, available online at <http://cisgw3.law.pace.edu/cases/950428a2.html>] (German law applied because acceptance reached offeror at its place of business in Germany) (see full text of the decision).

The "Reaching Principle" as a general rule in both CISG and PECL is applied to the following ways of indicating assent:

1) Indication of assent made by written statements [articles 18(1) CISG and 2:205(1) and 1:303(2) PECL]. A written declaration represents the most usual way in which the offeree shows his conformity with the offer.[2] In such a case, the contract is concluded when the communication "reaches" the offeror at his place of business or mailing address; if none exists, at his habitual residence. This means that the contract is concluded, for example, by the delivery of the communication by a messenger; the printing of a fax transmission; leaving the letter in the mailbox; the delivery of the notification informing of the arrival of a letter or telegram at the Post Office;[3] or when an EDI or Electronic-mail message enters into the offeror's computer system of information, or when the message is deposited in the electronic or informatic mailbox.

2) Indication of assent made by oral statements [articles 18(1) CISG, and 1:303(1)(3) and 2:205(1) PECL]. Oral statements are made not only when the parties negotiate face to face, but also when they use other means of communication: phone, radio, video-conference, etc. In such cases, under the CISG the contract is concluded when the offeror has knowledge of the acceptance,[4] whereas under the PECL the oral communication need merely be received.

3) Indication of assent made by conduct [articles 18(1) CISG and 2:205(2) PECL]. There are two types of acceptances by conduct that need to be considered:

a) Some kind of behavior or conduct (e.g., raising a hand and nodding one's head). Under the CISG, this is deemed effective when the offeror understands the meaning of the conduct. Consequently, this system of information should be adopted by an extensive interpretation of article 24 CISG. The PECL has a specific rule dealing with this matter that follows the general receipt theory: in case of acceptance by conduct, the contract is concluded when notice of the conduct reaches the offeror (article 2:205(2) PECL).[5]

b) Acts of performance (e.g., dispatch of the goods and payment of the price) which, contrary to the situation regulated in articles 18(3) CISG and 2:205(3) PECL, must reach the offeror in order to conclude the contract: 1) by the goods reaching the offeror's place of business; 2) by the communication that informs of the making of the act indicating assent reaching the other party; or 3) by the payment of the price.[6]

4) Late acceptance due to some irregularity during the transmission process [articles 21(2) CISG and 2:207(2) PECL]. Such acceptances are deemed effective when they reach the offeror.[7]

Besides the general rule established by the aforementioned articles of the CISG and the PECL, there are some other dispositions relevant to the formation of the contract that state exceptions to the receipt rule:

1) Silence or inaction [articles 18(1) CISG and 2:204(2) PECL]. The recognition of silence and inaction as acceptances implies the irrelevance of the communication. Strictly speaking, silence and inaction are not exceptions to the general rule since they cannot be submitted in any of the other classic theories devised to fix the moment of the conclusion of the contract - Declaration and Expedition (the latter known for the contract inter absentes in the common law systems as the Dispatch, Mailbox or Post rule). Silence and inaction, by definition, mean the concession of legal effects to an abstainer attitude of the offeree. The moment of the conclusion of the contract by silence or inaction is diverse and hangs on the factors that contribute to give them legal effect:

a) When silence or inaction are considered as acceptances by the dispositions of the Convention, their effectiveness is determined by the interpretation of the expression "without delay". In all of the cases the offeror is given an option to confirm (by his silence or inaction) in the situations contemplated by articles 19(2) and 21(2) CISG and 2:207(2) PECL), or to negate (also by his silence or inaction) in the hypothesis regulated by articles 21(1) CISG and 2:207(1) PECL) the conclusion of the contract. Thus, the termination of the period of time to confirm or negate the conclusion of the contract determines the failure or, on the contrary, the effectiveness of the acceptance.

b) When usages, or the practices the parties have established between themselves and the agreement of the parties give the effect of an acceptance to silence or inaction, the time given to the offeree to accept is determined (expressly, or impliedly) by the agreement (practices) of the parties previously established, or the agreement considered by applicable trade usages. Thus the effectiveness of the agreement will be established by the expiration of the period of time previously agreed on.[8]

c) When silence and inaction are deemed as acceptances due to any other circumstances - such as the existence of a "duty to speak" derived from the good faith principle - the expiration of the time in which the negative reply should have reached the offeror, leads to the concession of positive effects to the offeree's silence at that moment.[9]

2) Acts of performance [articles 18(3) CISG and 2:205(2) PECL]. These provisions deal with situations in which the offer, the practices already established between the parties or usages, authorize the offeree to accept by performing an act without the need to communicate it to the offeror. In this case, the contract is deemed concluded when the performance of the act begins, i.e., following the CISG, when the dispatch of the goods and the payment of the price are made.[10] Notwithstanding the clear meaning of these provisions, some CISG scholars believe that the acceptance by act of performance under article 18(3) needs to be communicated in order to deem the contract concluded.[11]

Usually the Battle of the Forms involves situations in which a contract is concluded by acts of performance.[12]

3) Late acceptance [article 21(1) CISG]. The last exception to the "Reaching Principle" in the Vienna text, is the one contemplated by article 21(1). This article states that the contract is concluded when the offeror dispatches a notice (Dispatch Principle) informing the offeree of the effectiveness of his declaration or when the offeror orally so informs the offeree (Information Theory). Thus, the CISG adopts the Dispatch Principle to regulate the conclusion of the contract when the offeror sends a written notice.[13] However, some scholars (following the Secretariat Commentary on article 19 of the 1978 Draft Convention),[14] believe that the moment of the conclusion of the contract in the circumstances contemplated by article 21(1) CISG, is the reception of the late acceptance. Precisely the same result is derived from article 2:207(1) PECL (and the corresponding PECL Comments), since the PECL does not adopt the dispatch theory; therefore, under the PECL, the conclusion of the contract in case of a late acceptance is governed by the receipt rule - i.e, when the late acceptance reaches the offeror.

Under the Vienna Convention, the first answer could also be considered affirmative. There is a general accord among many scholars on this issue.[16] The fact that a contract during its formation process did not follow the traditional scheme and was subsequently (or consequently) concluded without isolating an offer and a corresponding acceptance does not reduce the value of the dispositions in Part II of the Convention.[17] In such cases, the contract regulation is derived from the general principles to be found in Part II of the Convention, always taking into account the need for a uniform interpretation and application of the Convention (as per article 7 CISG). Although finding the precise moment in which the contract is concluded could be very difficult absent any other conclusive proof, in many cases the contract shall be deemed concluded either when there is a sufficient agreement between the parties, or when there is performance of the contract by both parties.

Lastly, whether the time of the conclusion of the sales contract may be important to determine the application of some specific matters, like domestic fiscal or regulatory laws, should also be decided by the applicable domestic law.[20]

6. LG Krefeld, 24 November 1992 (12 O 153/91) (Germany) <http://cisgw3.law.pace.edu/cases/921124g1.html> made clear that an offer, made by an Italian seller, was accepted conclusively when the German buyer received the goods without objecting to them. The Vienna scholars have not made any especial effort to clarify the structural differences between an indication of assent made by acts of performance under article 18(1) and indicia of assent under article 18(3). When the acts of performance are protected by the factors enumerated in article 18(3) (offer, practices and usages), the offeree can accept without communicating his acceptance, the contract being concluded when he makes the relevant act of performance. On the contrary, if the offeree accepts by an act of performance without the factors contemplated in article 18(3), his indication of assent must reach the offeror in order to conclude the contract -- article 18(1) and (2). In these cases the moment when the contract is concluded is different, as well as the limit to revoke the offer under article 16(1) CISG. The decision of OLG Frankfurt, 27 November 1979 (5 U 15/79) (Germany) established clearly the difference in the predeccesor to article 18 CISG, which is article 6 of the 1964 Uniform Law on the Formation of Contracts (ULF).